Quick commerce boom: Industry giants race to claim their slice of the pie

India's quick commerce sector has seen an astonishing growth rate, with sales increasing by more than 280 per cent over the past two years

The quick commerce market in India is on the verge of a significant expansion, projected to reach a valuation of $9.95 billion by 2029, growing from $3.34 billion in 2024. The sector is witnessing a surge of activity as new players enter the market, eager to capture their share of this rapidly evolving space.

 

What is quick commerce and why is it thriving?

 

Quick commerce refers to the rapid delivery of small orders, typically within a short time frame of 10 to 30 minutes. This sector has seen an astonishing growth rate, with sales increasing by more than 280 per cent over the past two years, as reported by financial services firm Chryseum. The Gross Merchandise Value (GMV) in quick commerce rose from $0.5 billion in FY22 to $3.3 billion in FY24, demonstrating its rapid ascent in comparison to traditional e-commerce.

   

Despite this growth, the sector remains largely untapped, with a penetration rate of only 7 per cent of a total addressable market valued at $45 billion. This presents a substantial opportunity for further expansion, especially as consumer demand for immediate access to a variety of products continues to increase.

 

Who are the major players?

 

The quick commerce landscape in India features several major players, each making strategic moves to strengthen their positions:

 

Zepto: Quick commerce startup Zepto has gained attention for its rapid delivery model and is currently in advanced talks to raise $100 million in funding. The company has also shifted its headquarters to Mumbai to plan for a public listing in 2025.

 

Blinkit: With a valuation of $15.4 billion, quick commerce platform Blinkit is contributing a higher share to Zomato's valuation than its mainstay food delivery business, according to UBS. Blinkit has also announced its plan to grow its network of dark stores to 2,000 by 2026. The once-troubled quick commerce startup was acquired by Zomato in a 2022 fire sale.

 

Swiggy: Swiggy recently appointed the new CEO of Instamart, reflecting its commitment to enhancing its quick delivery services. The company has also expanded Instamart's coverage to 43 cities, increasing its inventory significantly.

 

Amazon India: Amazon is preparing to enter the quick commerce segment, with plans to launch its offering in early 2025. The company has appointed Nishant Sardana, formerly responsible for Amazon India’s PC and appliance business, to spearhead this initiative.

 

Flipkart: Walmart-owned Flipkart has launched Minutes, a quick delivery service initially available in select Bengaluru areas. The company plans to establish around 100 dark stores to enhance its quick commerce offerings during the festive season.

 

Tata Group: Following Flipkart and Reliance Industries, the Tata Group is set to introduce its quick commerce service, Neu Flash, which will offer groceries, electronics, and fashion items to select users, with plans for gradual expansion.

 

BigBasket: Tata-owned BigBasket is also transitioning to a full-scale quick commerce platform, aiming to provide delivery within 10 to 30 minutes to meet the rising consumer demand.

 

Ola: Ola is set to enter the quick commerce dark store space by the end of 2024, offering its fully automated services to various brands through the government-backed Open Network for Digital Commerce (ONDC).

 

Talent poaching in quick commerce sector

 

A fierce competition for leadership talent is emerging within the quick commerce sector. Companies like Swiggy Instamart, Zepto, and Flipkart are aggressively hiring to bolster their teams amid growing competition. Competitive compensation packages, often reaching Rs 2-3 crore in salaries plus substantial stock options, are driving a wave of talent poaching across the industry.

 

For instance, Zepto has attracted senior talent from Amazon and Walmart, while Swiggy Instamart has welcomed former Flipkart executives to key leadership positions.

 

Consumer choices, future outlook, market size

 

The growth of quick commerce is driven by a notable shift in consumer behaviour, with many individuals now expecting instant access to a variety of goods. This shift has disrupted traditional retail players, prompting them to adapt or risk losing market share.

 

Even billionaire Mukesh Ambani, the owner of India’s largest supermarket chain, is testing a pilot for sub-30-minute deliveries, responding to the pressure from quick commerce competitors.

 

As of now, quick commerce platforms are diversifying their offerings beyond immediate top-up needs to include higher-value stock-up orders, indicating a maturing market. For instance, quick delivery of iPhones and gold coins, among others.

 

Major brands like Adidas and Decathlon are also entering this space, eager to capitalise on the growing consumer demand for quick commerce solutions.

 

From the looks of it, the quick commerce sector in India is set for remarkable growth, driven by an evolving consumer landscape and increased competition among major players. The combination of innovative business strategies and a robust market opportunity positions quick commerce as a pivotal segment within the broader retail ecosystem.